Li Keqiang Index doesn’t show a slowdown in Chinese growth

Consumption picks up slack while infrastructure investment slows

Official Chinese GDP numbers released on Monday showed a modest decrease in growth, in line with analyst expectations. The 6.7% year on year increase in the second quarter was down marginally from the 6.8% pace seen in the first three months of the year.

It’s useful to compare the headlines about a supposedly slowing Chinese economy with hard data. Two of the main components of the so-called Li Keqiang Index (freight turnover and electricity production) grew more than 10% in the year through May 31. This corresponds to what all the Big Data estimates of Chinese data have reported.

Also worth noting, despite a sharp decrease in infrastructure investment shown in the official numbers released Monday, GDP growth only slipped by 0.1 points. As China’s Caixin noted in a newsletter on Monday, this indicates positive structural changes are well underway in the economy.